North Carolina’s unemployment rate stayed flat at 5.4 percent in January, hovering at levels not seen in seven years.
The state’s jobless rate has come down from 6.6 percent in January 2014. Meanwhile, the national average was 5.7 percent in January.
The seasonally adjusted data was released Tuesday by the Labor and Economic Analysis Division of the N.C. Chamber of Commerce.
The state didn’t add jobs in January, and job gains in sectors like leisure, manufacturing and construction were offset by a precipitous falloff of 11,700 jobs in trade, transportation and utilities.
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Economist Richard Kaglic of the Federal Reserve Bank of Richmond said a loss of that magnitude is almost unheard of in a single job sector during an economic recovery, and may be a fluke caused by weather-related disruptions to the transportation industry.
Kaglic said that a steady jobless rate in January, despite the dramatic decline in transportation jobs, shows that the state’s economy overall is chugging along at a rapid clip.
“When you take a look at the preponderance of the evidence from labor markets it appears that North Carolina’s labor market is recovering more quickly here than the nation as a whole,” he said.
But economist Michael Walden of N.C. State University warned that North Carolina’s economic recovery may be showing early signs of slowing. Walden based his negative outlook on a prospective index of leading indicators he compiles every month.
The most recent index, issued Tuesday, slipped in December and “continues a downward trend since last fall.” Driving the decline is an increase in first time jobless claims and a drop in building permits, Walden wrote.
“The correct interpretation from these results is that the state economy will continue to expand,” Walden wrote, “but the rate of expansion may soon begin to lag.”
Economists agree that that strongest economy is one in which the labor pool grows, jobs are added and the jobless rate falls. In January, North Carolina met only one of the three criteria.
Also on Tuesday, the state’s Labor and Economic Analysis Division issued revised jobs data for 2014. The revised data show that the state gained 107,700 jobs last year, nearly 15 percent fewer than the 126,500 previously reported.
That means North Carolina has gained just 35,300 net payroll positions since December 2007, after recessionary job losses are accounted for.
In past months, as the state’s economy added jobs, the labor force was shrinking, which prompted some economists to say the state’s jobless rate was higher than it appeared.
The labor force is the pool of available people ready to take new jobs. The pool shrinks when job seekers become discouraged and stop looking, when people such as Baby Boomers retire and drop out of the workforce, and when students stay in school longer to wait out economic uncertainty.
In January, however, North Carolina’s labor force moved in the right direction, growing by 21,497 people.
Kaglic said this means that “more people found jobs than actually entered the workforce,” a sign that the state’s economy is growing.